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Thursday, December 29, 2011

Blocking the Strait of Hormuz – Will Iranians really do that?

"Closing the Strait of Hormuz is very easy for Iranian naval forces...Iran has comprehensive control over the strategic water way...” Iran's Navy Commander Rear Admiral Habibollah Sayyari told Press TV – a State run news Channel. Only a day before, Iran's Vice-President Mohammad Reza Rahimi warned that not a drop of oil would be allowed to pass through the Strait of Hormuz if sanctions are placed against Iran's oil exports.

The narrow Strait of Hormuz separates Oman and UAE from Iran. With 6 mile wide traffic lane (2 mile for inbound traffic, 2 mile for outbound traffic and another 2 mile act as separation median) is the only gateway to open seas for many of the major petroleum producing areas. According to a New York Times report, this Strait carried 33% of all the oil shipped by sea in 2009 (around 20% of all oil traded worldwide). To cover the strait ships needs to pass through the territorial waters of both Iran and Oman.

If Iran, currently under severe sanctions by US and Europe, cut the oil supplies through the Strait of Hormuz we may have to see another Oil Shock. Global economy, which is already suffering from various chronic deceases, may need to suffer one more. But the question is will Iran bloke the passage? If it did, will it be able to continue with the blockage?

Let’s take the first question; will it really block the passage? I think they will not be. Firstly, apart from the rhetoric it may not be possible for Iran to do so. This will not only hurt the enemies but their numbered friends as well. This action may not go down well with Chinese - one of the main importers of Mid-East oil and gas. If Iran hopes to block any future economic sanctions in UN it can happen only through China or Russia, as other veto empowered members US (no hope), UK (no hope especially after the recent Embassy crisis), France (in the end it may vote along with US and UK) will vote for sanctions.

Secondly, with one close ally - Syrian administration - facing existential threats, evaporated support from Turkey (a conclusion Iran may already reached after the deployment of NATO radars in Turkey) in multinational forums Iranians may became totally isolated.

Thirdly, by this action they will only end up in supporting US to insert more sanctions on them; as it will be easier for US to push forward more sanctions through Security Council. US, becoming more and more independent of Mideast oil may suffer less in face of Mideast oil crisis compared to Europe and developing countries of Asia. Europe may get supplies from Russia even though it will solidify their oil dependency relationship with Russia. So in the end of the day Iran will end up as a lonely player with more hostile neighbours.

Fourthly, it will become more difficult for Iranians to run the country under water tight sanctions. Without enough refined oil, squeeze on essential supplies it may not be easier for administration to pacify any future revolution - Now-a-days revolutions are not so peaceful anyway.

Consider the next case – Iran blocked the Strait. How long they will able to hold on that with US fifth fleet parked at nearby Bahrain? Apart from the three Russian built attack submarines, and ships loaded with Chinese built anti ship missiles most of the Naal assets are very old - bought form US at the time of Shah. Airforce also faces the same issue. ‘Navy of the Army of the Guardians of the Islamic Revolution’ - bigger in numbers than the regular Iran Navy, is also in a similar shape. Many of their bases are in the small islands of Persian Gulf – a vulnerable target to powerful enemy bombing.

In case of attacks - if restricted to sea, it may result in the destruction of major Iranian naval assets. In such a situation if US or Israel attempted for precision strike on Iranian nuclear sites, it may or may not end up with destroying the facility but it will certainly creates more problems. Moreover Iran possesess a good missile system capable of hitting many important targets in the region. This will create problems for US and its allies in the region. If US needed an administration change in Iran they need to wait, such changes should come through the efforts of common citizens otherwise it will only create instability.

But apart from the rhetoric chances for a real blockade of Hormuz strait is quite low. Iran may create some disturbances but it may not enlarge to the level of a naval engagement.

It will in be in the interest of Iranians to solve the problems peacefully. Iran is a country blessed with huge natural resources and geography. Located close to South Asia, Central Asia, Southern Europe and East Africa they can act as a trade source as well as hub for these regions. If assets are properly used and engaged peacefully with other countries they can achieve bigger influence than that of neighbours on other side of Persian Gulf. Europeans will be happy to buy more oil from Iran to reduce the dependency on Russian supplies, US may be happy to get an alternate route for NATO supplies to Afghanistan, relations with Israel may not improve much - but it will reduce the tensions in middle east, Sunni Arab countries may not like a powerful Shiite neighbour. But if both leaders displayed statesmanship, it can stop many bloody sectarian conflicts in the region.

Still a great path is available for Iran to move on. Now it’s on the hands of Iranian administrators to decide in which way they want to proceed, before taking any decision it will be helpful for them to travel in Ethihad airways to Dubai and to see what peace combined with oil money can do for the people. I am sure that everybody wants to write their name in the history using golden letters… the question is who will get the chance?